IDEAS home Printed from https://ideas.repec.org/a/eco/journ2/2022-01-51.html
   My bibliography  Save this article

Asymmetric Effect of Renewable Energy Generation and Clean Energy on Green Economy Stock Price: ANonlinear ARDL Approach

Author

Listed:
  • Avazkhodjaev S. Shakhabiddinovich

    (UKM-Graduate School of Business, The National University of Malaysia, Malaysia)

  • Noor Azuddin bin Yakob

    (UKM-Graduate School of Business, The National University of Malaysia, Malaysia)

  • Lau Wee Yeap

    (Faculty of Business and Economics, University of Malaya, Malaysia,)

Abstract

This paper examines the asymmetric impact renewable energy generation and clean energy prices on green economy stock prices by employing monthly data for all three indices end on 2021M07, and start on 2010M12. The nonlinear ARDL approach (NARDL) is applied in order to find short-run and long-run asymmetries. The empirical results indicate that renewable energy generation significant negative impact on green economy stock prices. For the clean energy prices have a positive and negative significant impact on green economy stock prices in selected markets under concern. The short-run coefficients of clean energy stock prices have a significant positive affect on green economy stock prices. The Wald test results confirmed the green economy stock price adjustment is running towards the long-and short-run steady increment regarding positive and negative shocks in renewable energy generation and clean energy. Finally, the dynamic multipliers showed that prices of renewable energy generation have a positive (negative) impact on green economy stock prices. Indeed, clean energy prices respond quickly to the changes (both positive and negative) on green economy prices in all selected markets. In sum, the negative shocks dominate positive shocks in renewable energy generation and clean energy, and results indicate that a positive and negative relationship was noted between these covariates and green economy stock prices.

Suggested Citation

  • Avazkhodjaev S. Shakhabiddinovich & Noor Azuddin bin Yakob & Lau Wee Yeap, 2022. "Asymmetric Effect of Renewable Energy Generation and Clean Energy on Green Economy Stock Price: ANonlinear ARDL Approach," International Journal of Energy Economics and Policy, Econjournals, vol. 12(1), pages 407-415.
    • Handle: RePEc:eco:journ2:2022-01-51
    as

    Download full text from publisher

    File URL: http://www.econjournals.com/index.php/ijeep/article/download/12754/6627/29659
    Download Restriction: no
    File URL: http://www.econjournals.com/index.php/ijeep/article/view/12754/6627
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Shahbaz, Muhammad & Raghutla, Chandrashekar & Chittedi, Krishna Reddy & Jiao, Zhilun & Vo, Xuan Vinh, 2020. "The effect of renewable energy consumption on economic growth: Evidence from the renewable energy country attractive index," Energy, Elsevier, vol. 207(C).
    2. Sadorsky, Perry, 2009. "Renewable energy consumption and income in emerging economies," Energy Policy, Elsevier, vol. 37(10), pages 4021-4028, October.
    3. Zhao, Lin & Zhang, Xun & Wang, Shouyang & Xu, Shanying, 2016. "The effects of oil price shocks on output and inflation in China," Energy Economics, Elsevier, vol. 53(C), pages 101-110.
    4. Jarosław Brodny & Magdalena Tutak, 2020. "Analyzing Similarities between the European Union Countries in Terms of the Structure and Volume of Energy Production from Renewable Energy Sources," Energies, MDPI, vol. 13(4), pages 1-37, February.
    5. Raza, Naveed & Jawad Hussain Shahzad, Syed & Tiwari, Aviral Kumar & Shahbaz, Muhammad, 2016. "Asymmetric impact of gold, oil prices and their volatilities on stock prices of emerging markets," Resources Policy, Elsevier, vol. 49(C), pages 290-301.
    6. Salari, Mahmoud & Kelly, Inas & Doytch, Nadia & Javid, Roxana J., 2021. "Economic growth and renewable and non-renewable energy consumption: Evidence from the U.S. states," Renewable Energy, Elsevier, vol. 178(C), pages 50-65.
    7. M. Hashem Pesaran & Yongcheol Shin & Richard J. Smith, 2001. "Bounds testing approaches to the analysis of level relationships," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 16(3), pages 289-326.
    8. Namahoro, Jean Pierre & Wu, Qiaosheng & Xiao, Haijun & Zhou, Na, 2021. "The asymmetric nexus of renewable energy consumption and economic growth: New evidence from Rwanda," Renewable Energy, Elsevier, vol. 174(C), pages 336-346.
    9. Balsalobre-Lorente, Daniel & Shahbaz, Muhammad & Roubaud, David & Farhani, Sahbi, 2018. "How economic growth, renewable electricity and natural resources contribute to CO2 emissions?," Energy Policy, Elsevier, vol. 113(C), pages 356-367.
    10. Alam, Md. Mahmudul & Murad, Md. Wahid, 2020. "The impacts of economic growth, trade openness and technological progress on renewable energy use in organization for economic co-operation and development countries," Renewable Energy, Elsevier, vol. 145(C), pages 382-390.
    11. Wang, Qiang & Wang, Lili, 2020. "Renewable energy consumption and economic growth in OECD countries: A nonlinear panel data analysis," Energy, Elsevier, vol. 207(C).
    12. Chen, Chaoyi & Pinar, Mehmet & Stengos, Thanasis, 2020. "Renewable energy consumption and economic growth nexus: Evidence from a threshold model," Energy Policy, Elsevier, vol. 139(C).
    13. Fousekis, Panos & Katrakilidis, Constantinos & Trachanas, Emmanouil, 2016. "Vertical price transmission in the US beef sector: Evidence from the nonlinear ARDL model," Economic Modelling, Elsevier, vol. 52(PB), pages 499-506.
    14. Belaïd, Fateh & Zrelli, Maha Harbaoui, 2019. "Renewable and non-renewable electricity consumption, environmental degradation and economic development: Evidence from Mediterranean countries," Energy Policy, Elsevier, vol. 133(C).
    15. Nguyen, Kim Hanh & Kakinaka, Makoto, 2019. "Renewable energy consumption, carbon emissions, and development stages: Some evidence from panel cointegration analysis," Renewable Energy, Elsevier, vol. 132(C), pages 1049-1057.
    16. Subrata Ghatak & Jalal Siddiki, 2001. "The use of the ARDL approach in estimating virtual exchange rates in India," Journal of Applied Statistics, Taylor & Francis Journals, vol. 28(5), pages 573-583.
    17. Narayan, Paresh Kumar & Narayan, Seema, 2007. "Modelling oil price volatility," Energy Policy, Elsevier, vol. 35(12), pages 6549-6553, December.
    18. Razmi, Seyedeh Fatemeh & Ramezanian Bajgiran, Bahareh & Behname, Mehdi & Salari, Taghi Ebrahimi & Razmi, Seyed Mohammad Javad, 2020. "The relationship of renewable energy consumption to stock market development and economic growth in Iran," Renewable Energy, Elsevier, vol. 145(C), pages 2019-2024.
    19. Guo, Yaoqi & Yu, Chenxi & Zhang, Hongwei & Cheng, Hui, 2021. "Asymmetric between oil prices and renewable energy consumption in the G7 countries," Energy, Elsevier, vol. 226(C).
    20. Nicholas Apergis & James E. Payne, 2020. "NAFTA and the convergence of CO2 emissions intensity and its determinants," International Economics, CEPII research center, issue 161, pages 1-9.
    21. Sim, Nicholas & Zhou, Hongtao, 2015. "Oil prices, US stock return, and the dependence between their quantiles," Journal of Banking & Finance, Elsevier, vol. 55(C), pages 1-8.
    22. Rahman, Mohammad Mafizur & Velayutham, Eswaran, 2020. "Renewable and non-renewable energy consumption-economic growth nexus: New evidence from South Asia," Renewable Energy, Elsevier, vol. 147(P1), pages 399-408.
    23. Robin C. Sickles & William C. Horrace (ed.), 2014. "Festschrift in Honor of Peter Schmidt," Springer Books, Springer, edition 127, number 978-1-4899-8008-3, September.
    24. da Silva, Patrícia Pereira & Cerqueira, Pedro André & Ogbe, Wojolomi, 2018. "Determinants of renewable energy growth in Sub-Saharan Africa: Evidence from panel ARDL," Energy, Elsevier, vol. 156(C), pages 45-54.
    25. Dogan, Eyup & Sebri, Maamar & Turkekul, Berna, 2016. "Exploring the relationship between agricultural electricity consumption and output: New evidence from Turkish regional data," Energy Policy, Elsevier, vol. 95(C), pages 370-377.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Rui Dias & Nuno Teixeira & Paulo Alexandre & Mariana Chambino, 2023. "Exploring the Connection between Clean and Dirty Energy: Implications for the Transition to a Carbon-Resilient Economy," Energies, MDPI, vol. 16(13), pages 1-21, June.
    2. Salokhiddin Avazkhodjaev & Jaloliddin Usmonov & M ria Bohdalov & Wee-Yeap Lau, 2022. "The Causal Nexus between Renewable Energy, CO2 Emissions, and Economic Growth: New Evidence from CIS Countries," International Journal of Energy Economics and Policy, Econjournals, vol. 12(6), pages 248-260, November.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Salokhiddin Avazkhodjaev & Jaloliddin Usmonov & M ria Bohdalov & Wee-Yeap Lau, 2022. "The Causal Nexus between Renewable Energy, CO2 Emissions, and Economic Growth: New Evidence from CIS Countries," International Journal of Energy Economics and Policy, Econjournals, vol. 12(6), pages 248-260, November.
    2. Raza, Naveed & Jawad Hussain Shahzad, Syed & Tiwari, Aviral Kumar & Shahbaz, Muhammad, 2016. "Asymmetric impact of gold, oil prices and their volatilities on stock prices of emerging markets," Resources Policy, Elsevier, vol. 49(C), pages 290-301.
    3. Chen, Chaoyi & Pinar, Mehmet & Stengos, Thanasis, 2021. "Determinants of renewable energy consumption: Importance of democratic institutions," Renewable Energy, Elsevier, vol. 179(C), pages 75-83.
    4. Lu, Zhou & Gozgor, Giray & Mahalik, Mantu Kumar & Padhan, Hemachandra & Yan, Cheng, 2022. "Welfare gains from international trade and renewable energy demand: Evidence from the OECD countries," Energy Economics, Elsevier, vol. 112(C).
    5. Namahoro, Jean Pierre & Wu, Qiaosheng & Xiao, Haijun & Zhou, Na, 2021. "The asymmetric nexus of renewable energy consumption and economic growth: New evidence from Rwanda," Renewable Energy, Elsevier, vol. 174(C), pages 336-346.
    6. Shrestha, Anil & Mustafa, Andy Ali & Htike, Myo Myo & You, Vithyea & Kakinaka, Makoto, 2022. "Evolution of energy mix in emerging countries: Modern renewable energy, traditional renewable energy, and non-renewable energy," Renewable Energy, Elsevier, vol. 199(C), pages 419-432.
    7. Filimonova Irina Viktorovna & Nemov Vasily Yurievich & Provornaya Irina Viktorovna & Ozhogova Lyubov Mikhailovna, 2021. "Impact of Renewable Energy Sources Consumption on Economic Growth in Europe and Asia-Pacific Region," International Journal of Energy Economics and Policy, Econjournals, vol. 11(6), pages 270-278.
    8. Dabboussi, Moez & Abid, Mehdi, 2022. "A comparative study of sectoral renewable energy consumption and GDP in the U.S.: Evidence from a threshold approach," Renewable Energy, Elsevier, vol. 192(C), pages 705-715.
    9. Savranlar, Buket & Atay Polat, Melike & Aslan, Alper, 2023. "What are the mistakes we think are correct about the ‘Natural resource curse’ hypothesis? New insights from quantile regressions via method of moments for EU," Resources Policy, Elsevier, vol. 85(PA).
    10. David Guan & Ubaldo Comite & Muhammad Safdar Sial & Asma Salman & Boyao Zhang & Stefan B. Gunnlaugsson & Urszula Mentel & Grzegorz Mentel, 2021. "The Impact of Renewable Energy Sources on Financial Development, and Economic Growth: The Empirical Evidence from an Emerging Economy," Energies, MDPI, vol. 14(23), pages 1-13, December.
    11. Mehmet Balcilar & Ojonugwa Usman & George N. Ike, 2023. "Investing green for sustainable development without ditching economic growth," Sustainable Development, John Wiley & Sons, Ltd., vol. 31(2), pages 728-743, April.
    12. Dogan, Eyup & Altinoz, Buket & Madaleno, Mara & Taskin, Dilvin, 2020. "The impact of renewable energy consumption to economic growth: A replication and extension of Inglesi-Lotz (2016)," Energy Economics, Elsevier, vol. 90(C).
    13. Syed Jawad Hussain Shahzad & Elie Bouri & Naveed Raza & David Roubaud, 2019. "Asymmetric impacts of disaggregated oil price shocks on uncertainties and investor sentiment," Review of Quantitative Finance and Accounting, Springer, vol. 52(3), pages 901-921, April.
    14. Vural, Gulfer, 2021. "Analyzing the impacts of economic growth, pollution, technological innovation and trade on renewable energy production in selected Latin American countries," Renewable Energy, Elsevier, vol. 171(C), pages 210-216.
    15. Khan, Irfan & Hou, Fujun & Zakari, Abdulrasheed & Tawiah, Vincent Konadu, 2021. "The dynamic links among energy transitions, energy consumption, and sustainable economic growth: A novel framework for IEA countries," Energy, Elsevier, vol. 222(C).
    16. Manu, Emmanuel Kwaku & Chen, George S. & Asante, Dennis, 2022. "Regional heterogeneities in the absorptive capacity of renewable energy deployment in Africa," Renewable Energy, Elsevier, vol. 193(C), pages 554-564.
    17. Djellouli, Nassima & Abdelli, Latifa & Elheddad, Mohamed & Ahmed, Rizwan & Mahmood, Haider, 2022. "The effects of non-renewable energy, renewable energy, economic growth, and foreign direct investment on the sustainability of African countries," Renewable Energy, Elsevier, vol. 183(C), pages 676-686.
    18. Trinh, Hai Hong & Sharma, Gagan Deep & Tiwari, Aviral Kumar & Vo, Diem Thi Hong, 2022. "Examining the heterogeneity of financial development in the energy-environment nexus in the era of climate change: Novel evidence around the world," Energy Economics, Elsevier, vol. 116(C).
    19. Rabie Said & Muhammad Ishaq Bhatti & Ahmed Imran Hunjra, 2022. "Toward Understanding Renewable Energy and Sustainable Development in Developing and Developed Economies: A Review," Energies, MDPI, vol. 15(15), pages 1-12, July.
    20. Shahzad, Umer & Lv, Yulan & Doğan, Buhari & Xia, Wanjun, 2021. "Unveiling the heterogeneous impacts of export product diversification on renewable energy consumption: New evidence from G-7 and E-7 countries," Renewable Energy, Elsevier, vol. 164(C), pages 1457-1470.

    More about this item

    Keywords

    Renewable Energy; Clean Energy; Green Economy; Asymmetric Analysis; Nonlinear ARDL;
    All these keywords.

    JEL classification:

    • F47 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Forecasting and Simulation: Models and Applications
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G17 - Financial Economics - - General Financial Markets - - - Financial Forecasting and Simulation
    • Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General
    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eco:journ2:2022-01-51. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Ilhan Ozturk (email available below). General contact details of provider: http://www.econjournals.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.